Cal. Code Regs. tit. 18 § 24365-24368(a)
Sections 24365 to 24368, inclusive, provide two methods for treating research or experimental expenditures paid or incurred by the taxpayer in connection with its trade or business. These expenditures may be treated as expenses not chargeable to capital account and deducted in the year in which they are paid or incurred (see Reg. 24365-24368(c)), or they may be deferred and amortized (see Reg. 24365-24368(d)). Research or experimental expenditures which are neither treated as expenses nor deferred and amortized under Sections 24365 to 24368, inclusive, must be charged to capital account. The expenditures to which Sections 24365 to 24368, inclusive, apply may relate either to a general research program or to a particular project. See Reg. 24365-24368(b) for the definition of research and experimental expenditures. The term "paid or incurred," as used in Sections 24365 to 24368, inclusive, and in Regs. 24365-24368(a) to 24365-24368(d), inclusive, is to be construed according to the method of accounting used by the taxpayer in computing net income. See Section 23033.
Cal. Code Regs. Tit. 18, § 24365-24368(a)
This regulation is substantially the same as Section 26 CFR 1.174-1.